Should Gee Co. proceed with the acquisition of Bea Co.? yes or no? show your solution. The management team of Gee Co. is deciding to acquire Bea Co. an entity that sells a product that compliments its own product. The management of Bea Co. demands a price of P18,000,000 for it to agree with the acquisition by Gee Co. Relevant data gathered for annual operations are as follows: Gee Co. Вea Co. Combined Average Net Income 3,500,000 2,500,000 6,500,000 Depreciation Expense 250,000 150,000 350,000 WACC 12% 15% 12.50%

Should Gee Co. proceed with the acquisition of Bea Co.? yes or no? show your solution. The management team of Gee Co. is deciding to acquire Bea Co. an entity that sells a product that compliments its own product. The management of Bea Co. demands a price of P18,000,000 for it to agree with the acquisition by Gee Co. Relevant data gathered for annual operations are as follows: Gee Co. Вea Co. Combined Average Net Income 3,500,000 2,500,000 6,500,000 Depreciation Expense 250,000 150,000 350,000 WACC 12% 15% 12.50%

SWFT Corp Partner Estates Trusts

42nd Edition

ISBN:9780357161548

Author:Raabe

Publisher:Raabe

Chapter7: Corporations: Reorganizations

Section: Chapter Questions

Problem 28P

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If PROMDI Co., a new company would acquire the net assets of CARDO Co and SYANO Co. PROMDI Co will be issuing 30,000 shares to CARDO and 12,000 shares to SYANO. The following is the balance sheet of PROMDI Co, followed by the fair values and additional unpaid costs incurred by PROMDI in the acquisition: Compute for the goodwill
The following are several figures reported for Allister and Barone as of December 31, 2021: Allister Barone Inventory $ 600,000 $ 400,000 Sales 1,200,000 1,000,000 Investment income not given Cost of goods sold 600,000 500,000 Operating expenses 280,000 350,000 Allister acquired 90 percent of Barone in January 2020. In allocating the newly acquired subsidiary's fair value at the acquisition date, Allister noted that Barone had developed a customer list worth $76,000 that was unrecorded on its accounting records and had a five-year remaining life. Any remaining excess fair value over Barone's book value was attributed to goodwill. During 2021, Barone sells inventory costing $140,000 to Allister for $200,000. Of this amount, 15 percent remains unsold in Allister's warehouse at year-end. Determine balances for the following items that would appear on Allister's consolidated financial statements for 2021: Inventory Sales Cost of Goods Sold…
During 20X4, the Pencil Corp. entered into negotiations to buy Stilo Company, finally agreeing on a final cash purchase price of $534,000. Pencil will acquire all assets and liabilities of Stilo effective 31 December 20X4, except for the existing cash balances of Stilo.The 31 December 20X4 balance sheet prepared by Stilo is shown below in column (a), and the revised fair values added later by Pencil are shown in column (b).STILO COMPANY BALANCE SHEETAt 31 December 20X4 (a) Book Values of Stilo Co. (b) Fair Values assigned by Pencil Corp.Assets Cash $ 50,000 n/aAccounts receivable (net) 106,000 $ 108,000Inventory 320,000 180,000Property, plant, and equipment (net) 618,000 570,000Land 22,000 80,000Franchise (unamortized balance) 38,000 42,000Total $1,154,000 Liabilities and shareholders’ equity Current liabilities $ 74,000 74,000Bonds payable 400,000 400,000Shareholders’ equity 680,000 n/aTotal $1,154,000 Required1. Compute the amount of goodwill purchased by Pencil.2. Give the entry for…
The following are several figures reported for Allister and Barone as of December 31, 2021: Allister Barone Inventory $ 580,000 $ 380,000 Sales 1,160,000 960,000 Investment income not given Cost of goods sold 580,000 480,000 Operating expenses 270,000 340,000 Allister acquired 90 percent of Barone in January 2020. In allocating the newly acquired subsidiary's fair value at the acquisition date, Allister noted that Barone had developed a customer list worth $72,000 that was unrecorded on its accounting records and had a six-year remaining life. Any remaining excess fair value over Barone's book value was attributed to goodwill. During 2021, Barone sells inventory costing $138,000 to Allister for $196,000. Of this amount, 20 percent remains unsold in Allister's warehouse at year-end. Determine balances for the following items that would appear on Allister's consolidated financial statements for 2021:
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ABC Corporation is planning to purchase another entity. ABC gathered the following information based on the publicly available financial reports: On the target acquisition date, the fair value of the net assets of the entity is expected to be at P6,000,000. ABC deems a 15%-rate appropriate for capitalization purposes. If ABC is willing to value the goodwill using the capitalization of average earnings method based on the past five years, how much should its offer price be on the entity?
The following are several figures reported for Allister and Barone as of December 31, 2021: Allister Barone Inventory $ 500,000 $ 300,000 Sales 1,000,000 800,000 Investment income not given Cost of goods sold 500,000 400,000 Operating expenses 230,000 300,000 Allister acquired 90 percent of Barone in January 2020. In allocating the newly acquired subsidiary’s fair value at the acquisition date, Allister noted that Barone had developed a customer list worth $78,000 that was unrecorded on its accounting records and had a four-year remaining life. Any remaining excess fair value over Barone’s book value was attributed to goodwill. During 2021, Barone sells inventory costing $130,000 to Allister for $180,000. Of this amount, 10 percent remains unsold in Allister’s warehouse at year-end. Determine balances for the following items that would appear on Allister’s consolidated financial statements for 2021: What is cost of goods sold?
Moon Company is contemplating the acquisition of Yount, Inc., on January 1, 2015. If Moon acquires Yount, it will pay $730,000 in cash to Yount and acquisition costs of $20,000. The January 1, 2015, balance sheet of Yount, Inc., is anticipated to be as attached:Fair values agree with book values except for the inventory and the depreciable fixed assets, which have fair values of $70,000 and $400,000, respectively. Your projections of the combined operations for 2015 are as follows: Combined sales. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $200,000 Combined cost of goods sold, including Yount’s beginning inventory, at book value, which will be sold in 2015 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 120,000 Other expenses not including depreciation of Yount assets . . . . . . . . . . . . . . . . . . . . . . . . 25,000Depreciation on Yount fixed assets is…
The following are several figures reported for Allister and Barone as of December 31, 2021: AllisterBaroneInventory$400,000$200,000Sales 800,000 600,000Investment incomenot given Cost of goods sold 400,000 300,000Operating expenses 180,000 250,000 Allister acquired 70 percent of Barone in January 2020. In allocating the newly acquired subsidiary's fair value at the acquisition date, Allister noted that Barone had developed a customer list worth $65,000 that was unrecorded on its accounting records and had a five-year remaining life. Any remaining excess fair value over Barone's book value was attributed to goodwill. During 2021, Barone sells inventory costing $120,000 to Allister for $160,000. Of this amount, 20 percent remains unsold in Allister's warehouse at year-end. Determine balances for the following items that would appear on Allister's consolidated financial statements for 2021:
The following are several figures reported for Allister and Barone as of December 31, 2021: Allister Barone Inventory $ 570,000 $ 370,000 Sales 1,140,000 940,000 Investment income not given Cost of goods sold 570,000 470,000 Operating expenses 265,000 335,000 Allister acquired 90 percent of Barone in January 2020. In allocating the newly acquired subsidiary's fair value at the acquisition date, Allister noted that Barone had developed a customer list worth $70,000 that was unrecorded on its accounting records and had a five-year remaining life. Any remaining excess fair value over Barone's book value was attributed to goodwill. During 2021, Barone sells inventory costing $137,000 to Allister for $194,000. Of this amount, 15 percent remains unsold in Allister's warehouse at year-end. Determine balances for the following items that would appear on Allister's consolidated financial statements for 2021:
If PROMDI Co., a new company would acquire the net assets of CARDO Co and SYANO Co. PROMDI Co will be issuing 30,000 shares to CARDO and 12,000 shares to SYANO. The following is the balance sheet of PROMDI Co, followed by the fair values and additional unpaid costs incurred by PROMDI in the acquisition: compute for the consolidated total assets at the date of acquisition
If the management of Beauty Co. demands a price of P28,000,000, should the management of Gwapo Co. pursue the acquisition? yes no